Government reveals new fuel efficiency standards

On Sunday, the federal government revealed the new vehicle efficiency standards, with its preferred model for Australia, which would would bring the nation in line with the United States by around 2028.

The government said this would save the average Australian car owner around $1000 a year.

Their preferred option would also reduce emissions by about 369 million tonnes by 2050.

The government plans to introduce the legislation to Parliament in the first half of the year.

At the moment, Australia lags behind with Russia as one of the only advanced economies without fuel efficiency standards.

The nation's passenger cars are currently using 40 per cent more fuel compared to the European Union and 20 per cent more compared to the the US.

Transport Minister Catherine King said the government favoured a model which ensured "achievable change" and provided "the optimal cost benefit outcomes for Australian car buyers."

"The standard increases choice. It doesn't dictate what sort of car or ute people can buy, but will mean you have a wider range of modern and cheaper to run vehicles," she said.

Climate Change and Energy Minister Chris Bowen said these standards were "about ensuring Australian families and businesses can choose the latest and most efficient cars and utes, whether they're petrol and diesel engines, or hybrid, or electric."

The standard will give car makers targets for average emissions per kilometre for new passenger and light commercial vehicles. It will not affect existing vehicles.

Climate and some industry groups have welcomed the announcement.

Climate Council chief executive Amanda McKenzie said the announcement "gets us off the starter's grid and on the road to cheaper, cleaner transport."

She said many Australians were doing it tough and by giving them a "better choice of cleaner, cheaper-to-run cars, a strong fuel efficiency standard will cut household costs and clean up our air."

The Electric Vehicle Council praised Australia for joining the "rest of the developed world".

"Because previous federal governments failed to introduce New Vehicle Efficiency Standards, some car manufacturers have treated Australia as a dumping ground for their most inefficient models," chief executive Behyad Jafari said.

"Australia has always been at the back of the queue when it comes to the best and cheapest electric vehicles, because car makers have been incentivised to offer them elsewhere first. That should end now with this policy, and Australian car buyers should notice the change very quickly."

ACT independent senator David Pocock also welcomed the release of new fuel efficiency standards, describing this a strong first step.

"For years Australia has languished at the back of the pack," he said.

"Our lack of any standards has cost Australians at the bowser, and has damaged the climate due to high emissions."

But he called on the government to be more ambitious and bring forward the planned commencement for the new standards from January 1 2025 to July 1 2024.

He also suggested a six month test period when penalties would not apply.

The Greens also want faster action, stating that it would be "a while" before the laws kick in.

Meanwhile, the opposition said it will be looking over the details of the policy.

Citing fears from industry representatives, opposition transport spokesperson Bridget McKenzie and opposition climate change spokesperson Ted O'Brien in a joint statement said the Coalition was also concerned "that the government's heavy-handed approach will drive utes off Australian roads".

"Australian's favourite vehicles could soon be unaffordable if Labor's fuel efficiency standard fails to strike the correct balance between minimising costs, reducing emissions and maximising choice for all Australians," they said.

Public consultation will run for the next month, before the government introduces the legislation into Parliament.